Tuesday, November 23, 2004
Copyright © Las Vegas Review-Journal

SEC FILING: Sands IPO goal: $524 million

Venetian owner seeks increase of $150 million from original filing

The Venetian is owned by Las Vegas Sands, which indicated in an SEC filing Monday that it hopes to generate more than $500 million with a stock offering of nearly 24 million shares. Photo by Ralph Fountain. Construction continues Monday on Palazzo, on the corner of Las Vegas Boulevard and Spring Mountain Road. Photo by Ralph Fountain.

Las Vegas Sands, owners of The Venetian, increased its initial public offering to more than $500 million, the company announced Monday in a filing with the Securities and Exchange Commission.

Funds from the IPO, which the company disclosed originally in September at $350 million, are expected to be used for building the new Palazzo, which is under construction next to The Venetian, as well as expanding the company's presence in Macau. Also, Las Vegas Sands has announced agreements to build casinos in the United Kingdom.

According to the filing, Las Vegas Sands plans to offer 23.8 million shares at an estimated price range of $20 to $22 per share, with a payout of $524 million. The underwriters, which are led by Goldman Sachs Group, will have the option to purchase an additional 3.6 million shares.

The company plans to trade on the New York Stock Exchange under the ticker LVS. Sands Chairman and Chief Executive Sheldon Adelson, who also controls the adjacent 1.2 million-square-foot Sands Expo and Convention Center, will own 88.1 percent of the common stock after the offering, the company said.

Venetian spokesman Ron Reese said the policy of the company was not to make additional comments other than what is listed in the public filings.

According to the filing, Las Vegas Sands believes, "The concentration of luxury and themed casino-hotels and resorts is expected to continue encouraging visitor interest in Las Vegas as a business event and vacation destination and, as a result, increase overall demand for hotel rooms, gaming and entertainment."

Analysts believe the announcement of an estimated price range signals the company is ready to begin its IPO road show for investors.

Brian Gordon, an analyst with Applied Analysis, said Las Vegas Sands is looking for "creative ways to raise the capital to fund its expansion plans."

He said The Venetian has been operating successfully, which is indicative of the company's strength.

"When you see that roughly 12 percent of the company is worth more than $500 million, I think they're getting a pretty reasonable stock price in this market," Gordon said.

Said Susquehanna analyst Eric Hausler, "Obviously not a lot of the company is being put into play, but the funds will be used for Las Vegas, Macau and the United Kingdom."

Adelson opened the 3,000-room Venetian casino on the Strip in 1999 on the site of the demolished Sands. With travel to Las Vegas surging, Las Vegas Sands opened a $275 million hotel tower expansion to The Venetian last year.

The company is building the $1.6 billion Palazzo on the corner of Las Vegas Boulevard and Spring Mountain Road, and it is expected to open in 2007. That development will be financed with proceeds from the $1.5 billion sale of the Grand Canal Shoppes, operating cashflow and debt financing.

The company is developing its second resort in the Chinese territory of Macau.

Other banks working on the sale are Citigroup, JPMorgan Chase & Co., Lehman Brothers Holdings, MerrillLynch & Co., Jefferies Group and UBS AG.

Las Vegas Sands revenue in the third quarter rose 88 percent to $343.6 million.